Tias Tamales, Inc. must choose among the following independent projects: Project...
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Accounting
Tias Tamales, Inc. must choose among the following independent projects:
| Project | Initial Cash Flow (CF0) (in millions) | NPV of ALL Cash Flows (CF0-CF) (in millions) |
| A | -3 | 1 |
| B | -3 | 3 |
| C | -4 | 4 |
| D | -4 | 3 |
| E | -6 | 5 |
| F | -8 | 5 |
| G | -9 | 6 |
1. What is the profitability index of project A? Round to two decimals.
2. What is the profitability index of project D? Round to two decimals.
3. Tias Tamales, Inc. has $17 million to invest. According to the profitability index, should Tias Tamales pursue project A?
4. Tias Tamales, Inc. has $17 million to invest. According to the profitability index, should Tias Tamales pursue project D?
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